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e-Commerce Credit Card Processing
e-Commerce Credit Card Processing services for online businesses, small,
home-based, mail order businesses are one of the most important features for
overall success. As the success of your business rests upon your ability to
generate sales and profit on your website. Accepting credit cards is important,
but you can't just set up e-Commerce Credit Card Processing and wait for the
sales to come in. It is critically important that you understand the issues, so
that you can properly implement e-Commerce Credit Card Processing to maximize
your sales.
It's a fact. Companies who accept credit card payments for goods and services
tend to generate higher revenues than those who only accept cash. According to
industry statistics, the average credit card sale is $40 versus just $9 for the
average cash sale. If that isn't enticement enough, consider the disadvantage
you may face if competitors offer credit card payment options and you do not.
e-Commerce Credit Card Processing is imperative for successful e-commerce. It
makes it easy for customers to purchase from you, encourages impulse buying,
reinforces your company's professionalism and increases your chance of closing a
sale.
Follow these steps to begin e-Commerce Credit Card Processing for online sales at
your web store:
Decide what you need. Many online businesses want to give customers a wide range
of payment options, and therefore pursue multiple credit card issuers. The most
common choices are bankcards issued by financial institutions and travel and
entertainment cards.
Some businesses choose card issuers based on how their fees are structured. For
example, companies that sell a small number of expensive items may be interested
in an issuer that charges a set amount per transaction, as opposed to a company
that sets fees as a percentage of total sales.
Accepting credit cards on the Web frequently requires a special type of merchant
status. Called a "card-not-present" account, this status authorizes you to
process sales without face-to-face interaction with customers. Even if your
business accepts cards at a physical location, it may need to re-apply for this
type of account.
e-Commerce Credit Card Processing costs average 2.7% of any transaction, checks
4.0% and cash 4.8%. These figures make sense when you consider how many times
paper money and coins must be counted and recounted by different individuals.
To offer the e-Commerce Credit Card Processing payment option, you need to set up
a merchant account-a bank account established by your company to receive the
proceeds of credit card purchases. Typically, along with the account, we also
need to lease equipment and software to facilitate the transactions and ensure
payments flow to your operating account. The process is slightly more
complicated if you wish to accept credit cards online.
Be particularly wary of lease terms. Don't agree to anything over 6 months under
any circumstance. Don't listen to anything about three years being a standard in
the industry or that there are ways to "get out early." If you break a lease
expect to see an entry on your credit report; don't get in the long lease in the
first place. A four-year lease broken can result in a collection account on your
credit report for thousands of $. However, a little known industry fact is that
some of the better merchant account providers allow you to "go on vacation"
where you won't be accepting orders or getting monthly charges. This period
counts toward your lease term.
e-Commerce Credit Card Processing systems can be broken up into many categories.
Two of them are traditional merchant accounts vs. brokered services. Traditional
systems offer you your own merchant account with a discount rate of maybe 1.6%
for "card present" (storefront) sales and 2.5% for "mail order, phone order"
(e-Commerce) sales. Daily orders are "batched" and transmitted to your checking
account in 2-3 days. Over the last few years new, brokered systems such as ccbill, ibill, paypal, and others have offered systems for accepting credit
cards. You do not have your own merchant account. Often, funds are transmitted
only twice per month. They typically have very high discount rates. The shopper
must leave your web site to complete the transaction (an e-Commerce NO-NO). Also,
many of these 3rd party systems force your customer to sign up with them. Stay
away from these services.
The greatest Mantra for e-Commerce Credit Card Processing systems is Shop around,
shop around, and then shop around some more. Compare all of the different types
of fees, lease terms, and monthly minimums you are offered. A very good question
to ask is to find out what the exact monthly minimum charge would be assuming
you did not process a single order during the month. Of those that are among the
lowest monthly, consider the ones with the lowest discount rate and then look at
per-transaction cost.
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